NEW DELHI: India has been rated as the second most largest foreign investor in the UK by consultancy firm Ernst and Young, acknowledging India Inc’s growing competitiveness and willingness to take up global challenges.

E&Y in its latest European Investment Monitor (EIM) has rated India as the second largest investor in the UK, behind the US which maintained its predominance as the single largest investor in Europe.

Overall Indian investments into Europe increased by 66 per cent, E&Y said.

“Indian companies are winning clients from Western European competitors by investing in sales and customer support offices and also software development centres close to their European customers as a means to drive growth,” E&Y Regional Development Director Nigel Wilcock said in a statement.

The investment monitor revealed that UK is still the most attractive investment destination in Europe with a 23 per cent increase in the number of projects announced in 2006. The number of projects during 2006 increased to 686 from to 559 in 2005.

The report shows that overall Europe continues to improve its amount of inward investment, with projects up by over 15 per cent from 3,066 in 2005 to 3,531 in 2006, with Western European countries being the principal beneficiaries.

Germany, Spain, Switzerland and Italy all showed a substantial growth in investment levels. Despite having previously threatened to overtake the UK as the most popular destination in Europe, investment to France grew modestly in 2006 with its overall share declining, it said.

“The rise in Western Europe has been driven by an increase in investment projects from the US into Europe - up 22 per cent from 813 in 2005 to 990 in 2006 - as well as a major hike in the number of projects originating from the UK, Switzerland and India,” Wilcock said.

Germany, the second most active country in terms of investment origin, is increasingly focused on Eastern Europe, he added.

Despite falling levels of investment to the UK and the rest of Europe by the US, it is still the single largest source of investments in Europe. US investment to the UK and Europe declined to 30 per cent of overall projects in 2006 from close to 50 per cent in 2000, the consultancy firm said.

Investments to Eastern European countries like Poland, Hungary, Russia and the Czech Republic declined in 2006.

However, investments in Romania, which has been admitted to the European Union in this year, attracted 140 projects in 2006 which grew from only 18 projects in 1997. It was ranked seventh in the overall European list.

“Manufacturing had a tough year across Europe in terms of new investment projects being announced. Whether or not this is the beginning of a long-term slow down in Central and Eastern European investment activity in manufacturing remains to be seen. But companies seeking a lower cost base do now appear to more likely to consider China and India as well other Asian hot spots,” Wilcock said.

Over 800 executives polled by E&Y during March this year said they were likely to look outside Europe for production operations and call centre functions partly because of rising employment costs in Eastern Europe, he added.

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A couple of recent articles (one at The Simple Dollar and another at Money Smart Life) got me to thinking about living in a flood zone and how important it can be to have flood insurance. Can you imagine what it would cost to recover from a flood? And are you prepared to foot that bill if it ends up happening? In most cases, the answers to these questions are no and no.

Before we go any further, let’s talk a bit about what exactly flood insurance is (and isn’t). Unlike a standard homeowner’s insurance policy, flood insurance covers losses due to flooding. A standard flood policy covers things such as structural damage, damage to your furnace, water heater, and/or air conditioner, debris cleanup, and damage to floor surfaces such as carpeting and tile. You can also buy a policy to cover your belongings.

If you live in a high risk area, chances are your mortgage lender requires you to carry flood insurance. But how exactly is flood risk determined? In general terms, FEMA has identified land areas (referred to Special Flood Hazard Areas) that run a 1% or greater risk of flooding in any given year. These are referred to as 100 year flood zones, and being located in one typically means that you have (and should probably want) to be carrying flood insurance.

While 1% per year doesn’t seem like a lot, consider the odds over time… Indeed, the chances of having at least one flood in a 100 year flood zone during a 30 year span (the life of a typical mortgage) is just a shade under 26%. That’s right, if you live in a 100 year flood zone, the odds are a little better than one in four that you’ll experience a flood during the life of a standard 30 year mortgage. Even over 10 or 20 years the chances of a flood are still pretty substantial, at 9.6% and 18.1%, respectively.

So how do you know if you need flood insurance? In many cases, your mortgage lender will tell you. But if you’re interested in checking things out yourself, you can take a gander at the flood maps — these are sometimes available at your local library, your county planning commission, etc. You can also check them out online at the FEMA Map Service Center. Alternatively, you can search for your address over at FloodSmart.gov.

Finally, how do you get flood insurance? If your community participates in the National Flood Insurance Program (NFIP) you should be able to purchase flood insurance from a local insurance agency. You can search for agents in your area by going here. Just keep in mind that there’s typically a 30 day waiting period before flood insurance takes effect, so you can’t simply wait for it to start raining before you call.

When considering your options, please keep in mind the importance of insuring against events that you cannot afford to deal with.

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DIAMONDS are a woman’s best friend, but pearls, especially black pearls, are the craze now and Fiji is not far behind in the pearl farming industry.

The black pearl industry in Fiji began in 1998 through the initiative of the Fisheries Department and the Commodity Development Framework with 10 farms whereby four are owned by foreigners and six by local villagers operating in Vanua Levu.

Based on statistics released by the Pacific Islands Pearl Exports to the United States of America for 2004-2006, Fiji earned $74,928 (US) in 2004, $276,561(US) in 2005 and $107,927(US) last year.

But compared to our neighbour Tahiti, Fiji’s production and export is quite low. However, local pearl farmer, Justin Hunter of J.Hunter Pearls Fiji says quantity should not be valued over the quality of the pearls that come out of Fiji.

J. Hunter Pearls Fiji, which is based in Savusavu, produces 50,000 to 60,000 pieces of black pearls a year but there are certain factors which play against the successful farming of black pearls in Fiji.

“Farming is intensive and markets are very tough. Most pearls go through either Hong Kong or Japan prior to other markets as this is where the many different grades are sorted out and then sent to respective markets,” said Mr Hunter.

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India’s rupee fell for the third day on speculation stock market inflows will decline after companies completed new share offerings that attracted overseas money.

The currency had gained for the past two weeks as ICICI Bank Ltd., the nation’s most valued financial company, and real- estate developer DLF Ltd. offered to sell shares worth a total $6.6 billion. Mumbai-based ICICI’s $4.3 billion sale was the biggest equity offering by an Indian company.

“The rupee’s advance may be over,” said Krishnamurthy Harihar, head of treasury at Mumbai-based Development Credit Bank Ltd. “The view in the market is that most of the inflows related to the ICICI and DLF share sales have already come. More inflows are unlikely for now.”

The rupee fell 0.2 percent to 40.945 against the dollar as of 5 p.m. in Mumbai, according to data compiled by Bloomberg. It dropped as low as 41.02 earlier. The 8.1 percent advance this year is the third-best among Asia-Pacific currencies.

ICICI Bank’s share sale, which closed June 22, attracted bids for more than 10 times the offer size, according to the National Stock Exchange. The DLF sale closed June 14 and was subscribed 3.5 times.

The share sales attracted more overseas investment to the local stock market. Global funds bought equities worth an average $109 million a day more than they sold last week, compared with $18 million during the previous week, according to data released by the Securities and Exchange Board of India.

Economic Growth

The rupee pared losses on speculation the nation’s economic growth will attract more investment from abroad. The Indian economy expanded 9.4 percent in the year through March, the fastest since 1989, according to the government.

“The chances of rupee gains still remain good because of the continuing inflows of investment,” said Prakash Rao, head of currency trading at UTI Bank Ltd. in Mumbai.

Monthly inflows of direct investment averaged $1.3 billion in the fiscal year ended March 31, compared with $461.7 million in the previous year, according to government data.

Indian companies are raising money abroad to fund business expansion back home as the South Asian economy grows at the second-fastest pace among the world’s major economies. Overseas borrowing by Indian firms rose 59 percent to $5.1 billion in March from the previous month, according to the central bank.

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Shares of Blackstone Group sank below the price they fetched in an initial public offering last week, as the bailout of a Wall Street hedge fund raised the specter of higher borrowing costs and took the shine off one of the largest IPOs ever.

Blackstone fell $1.69, or 5.2 percent, to $30.75 on Tuesday. The stock was sold to investors last Thursday at $31, spiked in its first day of trading to close at $35.06 on Friday, but then sank some 7.5 percent on Monday, setting up Tuesday’s decline.

Cowen & Co. trading analyst Mike Malone said the well-publicized troubles at two hedge funds operated by Bear Stearns Cos. are forcing investors to evaluate how easily Blackstone Group can raise money.

“It’s been a perfect environment for Blackstone over the course of the past several years,” Malone said. “Interest rates have been low and valuations on equities have been relatively cheap. If interest rates were to rise, that dynamic would change.”

Earlier this month, Merrill Lynch & Co. seized $850 million in collateral from a hedge fund called the Bear Stearns High-Grade Structured Credit Fund. The fund had lost more than 20 percent in the first four months of 2007, and Merrill Lynch, which lent money to the fund, worried it would be unable to repay the debt.

While Bear Stearns lent the fund $3.2 billion to assure other creditors their investments were safe, Malone said the bailout means some lenders may demand fatter interest rates for risky loans like debt used to leverage buyouts of public companies.

Under the private equity model, firms like Blackstone Group buy public companies, saddle them with debt and later sell them at a profit. Higher interest rates eat into the return on these types of investments and make it more difficult to raise money.

If lenders with shrunken risk appetites demand higher interest rates for private equity financing, Blackstone Group would have to pay to lenders more of the investment profit the firm currently pockets.

UBS Investment Research called this prospect “unlikely but scary.” Investors shying away from lending to private equity firms would choke off Blackstone’s access to loans and diminish the firm’s ability to cut deals, the firm said.

When Blackstone Group LP filed in March to sell shares of itself to the public, many people speculated the initial public offering signaled the end to the land rush in private equity.

Chief Executive Stephen A. Schwarzman, some suggested, foresaw an end to the easy money and cheap stocks that fueled a takeover boom.

Amid all the focus on the IPO’s weak performance, Schwarzman pulled out as a keynote speaker at a conference on Wednesday sponsored by The Wall Street Journal. A spokesman for Blackstone said Schwarzman was unable to attend.

Peter S. Cohan, president of management consulting and venture capital firm Peter S. Cohan & Associates, said the “golden era” may be over for private equity.

“Blackstone’s investors don’t want to stick around for the scary part of the movie,” Cohan said.

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An educational charity called today for a cross-party commission to examine the reasons why Britain has one of the worst rates of social mobility in the world.

Sir Peter Lampl, chairman of the Sutton Trust, said while social mobility in the UK has stabilised in recent years it is still at a very low level compared to other European countries and the US, and that the chance of a good education was key to the problem.

Children born in the UK in 1970 have less chance of escaping poverty than those born in 1958, according to the interim findings of research being carried out for the trust.

Sir Peter told BBC Radio 4’s Today programme that educational opportunities are still more likely to go to well-off people, despite a decade of Labour government.

“We really have the worst of all worlds: we have got inequality of opportunity with inequality of outcome. I think we are in a really terrible position. This is too important for party politics and we need a cross-party commission to really look at this,” he said.

He also suggested a return to taxpayer-funded places for less well-off pupils at independent schools.

The Conservative leader, David Cameron, said the research was “staggering” and that real improvements would come from a generation of non-selective schools such as Labour’s city academies.

Mr Cameron said: “If people aren’t achieving according to their talents and according to their potential, then it’s a huge waste for them, a huge waste for society and it’s also deeply unfair.”

He said making it easier for people to open new schools was the key to improving standards for all, alongside fostering “strong and stable families” and early years provision.

“If we spend our time just working out how to divide up a fixed number of good school places, we will never get anywhere. What we’ve got to do is increase the number of good school places.”

But he did not specify grammar schools as the solution. “Making a fixed decision at 11 between one sort of school and another is not the right answer.”

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